20VC closes new $400M fund to ‘make Europe great again,’ says Harry Stebbings | TechCrunch

Harry Stebbings, the U.K. podcaster who broke into the world of tech with his 20-minute interviews of venture capitalists and founders, parlayed that fame into becoming a VC himself. Now, Stebbings has closed his third investment vehicle, and it’s his biggest yet: 20VC, the firm named after the podcast series, has closed a $400 million fund. 

At a time when European technology companies continue to lag behind their U.S. counterparts at almost every stage of investment, 20VC’s new fund will focus on backing startups in the region, using Stebbings’ media nous and connections to bring more attention to them.

“I’m really fed up of everyone shitting on Europe,” he said in an interview earlier today. “We have unbelievable companies, and we have incredible people. We need to make Europe great again. MEGA!” he added with a giggle. 

About $125 million of the fund will be dedicated to seed investments, and $275 million will go to Series A rounds. The fund is yet to be deployed, Stebbings said, as 20VC is still investing out of its second fund, which raised $140 million in 2021. 

Stebbings says the new fund was raised in four weeks, which would be an exceedingly quick turnaround, considering the constraints that continue to swirl around venture capital. (Business Insider reported he was at least in pitching mode back in June.)

There are a few other notable takeaways from the news:

• Despite the tough climate for founders, this is a reminder that there is money out there for investing, and the pot is clearly still growing. 
• Europe remains an interesting opportunity for U.S. limited partners when it comes to startups. Stebbings pointed out that a majority of the backers in this fund are from the U.S., and more than half of that is institutional money. “I would never get into MIT as a student,” Stebbings said. “I’m thrilled that they decided to give me money to invest.”
• European VCs have a strong suit to play when it comes to connecting with European startups. 

Venture capitalist firms like Accel, as well as successful founders who have become investors, have an established presence in London and the wider region. Yet, a number of such investors are still putting money into 20VC. Why? Stebbings has put a very personal face onto his firm, and he helps investors hedge their bets.

In all, 20VC said 40 founders from companies like Atlassian, Candy Crush, Canva, Capital One, Datadog, Deliveroo, Eventbrite, Iconiq, Procore, Spotify, UiPath and Vinted invested in the fund. Also investing were general partners from Accel, Benchmark, Coatue, Cyberstarts, Founder Collective, Founders Fund, Khosla, NEA and TCV and Thrive. 

“We are the feet on the ground for the U.S. funds too,” he said. 

Stebbings has tapped into the zeitgeist around being an online creator who has built a successful business around his content. In his case, that business is in the area of venture capital, but he leverages his profile to help open doors and get in on term sheets. 

“The media platform has really helped,” he said. 20VC was essentially a “micro VC” when it debuted in 2020, with just $8.3 million to invest, typically to piggy back on seed rounds. Now it gets upwards of 50 million views on TikTok and YouTube — large numbers for what is effectively VC and startup inside baseball.  “Having your Sam Altman’s on the show, your Marc Benioff’s, it makes a big difference. Founders do really want to take your money.”

Stebbings himself is not a technologist by training — he was at university studying law when he started 20VC and dropped out when it all took off. He makes no attempts to hide this. 

“I don’t follow technology,” he said when I asked him if any categories are standing out right now. “I follow great entrepreneurs. I think it’s absolutely bullshit that we think we’re smarter than markets. If there’s one thing we have to learn, it is that great founders shape markets. And if that’s the case, my job is to simply find the best founders before anyone else.”

Beyond that, his selling point from early on has been that he brings operational experience to his portfolio companies.

“20 VC has done over £10 million in revenue and is a very profitable and sustainable business,” he said. “No, I’m not a technology founder, but I am an operator. I work seven days a week, 15 hours a day, and I have done for years.”

Now, that has been widened out, with 20VC operating what Stebbings describes as “sub-funds” in categories like sales, product and growth. These have teams also run by people with operator experience, who have their own carry and seek out companies (and founders) that look interesting and could benefit from their practical advice in these areas. 

Despite breaking the mold for how VCs are formed, Stebbings has yet to change the economics of VC. It remains “like any other market,” he said. “One percent of the companies make 90 percent of the gains.”

That might not be such a bad thing, though. “We can do more to normalise that in Europe, encouraging trying and failing,” he said. 

For VCs ironically, that extremely uneven math might spell more opportunity for big wins, not less, in his opinion. “Venture returns on the whole will go down, [but] for 1% of firms, they will be much, much bigger than ever, and better than ever, because the size of the outcomes is so much larger than ever,” he predicted.

That said, Stebbings is still waiting for his “MEGA” payout. A lot of the firms he’s invested in are still relatively young, the IPO market is still pretty dead, and some of the startups in its portfolio still point to the U.S. focus that 20VC had when it started.

The closest, Stebbings said, is probably Tripledot, the London-based gaming studio that appears to be valued at just over $1 billion, per PitchBook, and last raised in 2022.